Craft Beverage Reform and Modernization Act of 2015 May Bring Reduced Federal Excise Taxes and Regulatory Burdens to Producers

This month Oregon Senator Ron Wyden introduced a comprehensive tax reform bill, the Craft Beverage Reform and Modernization Act of 2015, that would ease regulations on smaller producers of alcoholic beverages and decrease excise taxes.  The Act combines aspects from prior bills—the Small BREW Act, the Fair BEER Act, the AGED Spirits Act, the Distillery Excise Tax Reform Act, the CIDER Act, and the Craft Beverage Bond Simplification Act—all of which received various measures of support from brewers, cider makers, distillers, and winemakers.  Support for the prior acts had been mixed, however, with the Brewers Association (BA) and the Beer Institute (BI) each lending support for only one of the bills.  Last week, both organizations publicly supported this new bill.

The bill would reduce excise taxes on breweries’ first 60,000 barrels in half, and would have a similar effect on wineries’ first 5,000 cases of wine and distillers’ first 1000,000 of proof gallons distilled spirits produced each year.  Wineries would also be able to take advantage of increased federal tax credits.  One aspect of the bill likely to have the greatest impact on wineries is the ability to expense production costs in the year they are incurred.

In addition to the changes in excise taxes, the bill also aims to get rid of outdated regulations and removes some bond requirements, extends filing periods, simplifies rules of record keeping and returns, and lifts some other burdens affecting the wine, hard cider, and distilled spirits industries.

The Craft Beverage Modernization and Tax Reform Act of 2015 has been referred to the Senate Finance committee.  A companion bill by the same name was filed in the House by Representative Erik Paulsen (R-MN) and Ron Kind (D-WI).   The Saalfeld Griggs Wine, Beer, and Cider Industry Team will be tracking the progress of this bill and will provide updates as it moves through the legislative process.